CBN launches supervisory pilot to tackle virtual asset risks

The Central Bank of Nigeria (CBN) has commenced a supervisory pilot programme targeting Virtual Asset Service Providers (VASPs) as part of efforts to curb financial crime risks and strengthen oversight in the fast-evolving digital asset space.

The initiative, focused on Anti-Money Laundering, Counter-Financing of Terrorism, and Counter-Proliferation Financing (AML/CFT/CPF) compliance, signals a more structured and risk-based approach to monitoring virtual asset activities within Nigeria’s financial system.

In a statement dated March 31, 2026 the CBN said the pilot forms part of its broader strategy to reinforce the integrity of the banking system in line with the Money Laundering (Prevention and Prohibition) Act 2022, the CBN Act, and the Banks and Other Financial Institutions Act (BOFIA) 2020. The apex bank noted that the exercise is designed to deepen its supervisory understanding of virtual asset risks while supporting market integrity and financial system stability.

The regulator explained that the pilot will focus on a select group of Virtual Asset Service Providers identified as relevant for supervisory engagement, adding that the programme does not override existing regulatory frameworks or the mandates of other authorities overseeing the sector.

According to the CBN, the exercise is aimed at building a structured understanding of the business models, operational practices, and risk exposures of participating entities. It also seeks to guide the firms in strengthening their compliance frameworks in line with global standards, particularly the Financial Action Task Force (FATF) recommendations on virtual assets, including the Travel Rule and measures to address proliferation financing risks.

Under the pilot, participating firms are required to submit monthly supervisory key performance indicators using prescribed templates, engage regularly with the CBN and, where applicable, the Nigerian Financial Intelligence Unit (NFIU), and undergo detailed reviews of their governance structures, customer onboarding processes, sanctions screening systems, transaction monitoring mechanisms, and cross-border operations.

They are also expected to demonstrate credible implementation plans for the Travel Rule, a global standard that mandates the sharing of transaction information between financial institutions to improve transparency and traceability in cross-border payments.

The CBN stressed that participation in the pilot is strictly supervisory and does not confer any licensing, regulatory approval, or authorisation on the entities involved. Rather, it provides a controlled environment for engagement, allowing the regulator to gather insights while guiding compliance improvements across the sector.

Entities participating in the initial phase include cNGN, Flutterwave, Juicyway, KoinKoin, KuCoin, and Paystack. The Central Bank described them as the first cohort of Virtual Asset Service Providers selected for the programme, which has been structured in multiple phases.

It added that subsequent phases have already been scheduled and are not open to new participants, underscoring the structured and pre-planned nature of the supervisory rollout.

The apex bank further assured that all data submitted by participating Firms would be treated as confidential supervisory information, handled in accordance with the Nigeria Data Protection Act 2023 and its internal confidentiality standards.

The move reflects a shift by the CBN toward more proactive engagement with the virtual asset ecosystem, balancing innovation with tighter regulatory scrutiny as digital financial services continue to expand across Nigeria’s economy.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.